> improve the situation for the rest of the world to compete
The risk is that USA and China will come together on a joint "AI non-proliferation" agreement in the same way that nuclear technology became restricted by the countries that already had the capability. This will lead to a de facto techno-colonization of the rest of the world just between themselves.
This was a topic of discussion at Trump and Xi's AI summit just last month.
Neither Xi nor Trump are going to be able to make that stick. The cat is well out of the bag by now.